Buried in a Washington Post article:
90 percent of all new home loans are funded or guaranteed by taxpayers
taxpayers are on the hook for most of the loans that are still being made if they go bad. And they are also on the line for any losses in the massive portfolios of old loans at Fannie Mae and Freddie Mac, which own or back more than $5 trillion in mortgages.
Gets better. WaPo is reporting a high risk of default (Are we surprised with a 9.7% official unemployment rate?)
There is growing evidence that many loans being guaranteed by the government have a significant risk of defaulting. Delinquencies are spiking. And the Federal Housing Administration, another source of government support for home loans, is quickly eating through its financial cushion as losses mount.
Finally look at the money WaPo is pointing to that has been poured into the mortgage market (versus the Zombie banks):
The outlay has already reached about $1 trillion over the past year and is rising. During that time, the government has pumped more money into the mortgage market than has been spent on Medicare or Social Security or the defense budget, more even than Washington has paid to bail out banks and other struggling companies.
This is a statistic that is good news really:
Nearly one-third of those who obtained home loans during the boom years of 2005 and 2006 couldn't get one today, according to mortgage industry analysts.
Do we really want loans given to people making $9/hr for a $400k property?
But one must ask themselves what is this doing to home prices and with more and more Americans simply unable to pay the bills...maybe the ultimate housing program is a jobs program.
Ya know, that word we're always talking about on this site. Income.